Assessing the Energy Efficiency Information Gap: Results from a Survey of Home Energy Auditors

Commercial and residential buildings are responsible for 42 percent of all U.S. energy consumption and 41 percent of U.S. CO2 emissions. Engineering studies identify several investments in new enegy-efficiency equipment or building retrofits that would more than pay for themselves in terms of lower future energy costs, but homeowners and businesses generally do not have good information about how to take advantage of these opportunities. Energy auditors make up a growing industry of professionals who evaluate building energy use and provide this information to building owners. This paper reports the results of a survey of nearly 500 home energy auditors and contractors that Resources for the Future conducted in summer 2011. The survey asked about the characteristics of these businesses and the services they provide, the degree to which homeowners follow up on their recommendations, and the respondents’ opinions on barriers to home energy retrofits and the role for government. Findings from the survey suggest that the audit industry only partially is filling the information gap. Not enough homeowners know about or understand audits, and the follow-through on recommendations once they do have audits is incomplete. But the survey findings suggest that low energy prices and the high cost of retrofits may be more responsible for these outcomes than failures of information.

Many energy experts and policymakers have puzzled over the fact that homeowners and businesses often fail to make investments in energy efficiency equipment—even though future energy savings exceed investment costs. The difference between actual and optimal uptake of energy efficiency technologies, known as the energy efficiency gap, has been attributed to a number of factors, including a lack of information about energy efficiency opportunities. This issue is particularly prominent in the residential sector, where homeowners may have little knowledge about the retrofitting options and gathering information is costly.

Providing targeted advice to homeowners through energy audits has the potential to reduce the information barrier and, in turn, the efficiency gap. To better understand the role of information in residential decisionmaking, RFF experts recently conducted a survey of nearly 500 home energy auditors. In a new RFF discussion paper, Karen Palmer, Margaret Walls, Hal Gordon, and Todd Gerarden address questions around three major themes:

• The nature of the industry (for example, business characteristics and services)
• The degree of homeowner follow-up on auditor recommendations
• Auditor opinions on barriers to home energy improvements and the role for government

These survey findings suggest that the audit industry is only partially filling the efficiency gap. Auditors report infrequent homeowner follow-through on recommendations, with 30 percent reporting that homeowners make at least one of their recommended improvements only half the time or less and virtually none reporting that homeowners make all recommended improvements.

Auditors identify the high cost of efficiency improvements and low cost of energy as possible explanations for this infrequent investment in energy efficiency. Even if auditors are able to effectively close the information gap faced by homeowners, energy and upgrade costs are likely to be more important in determining the resulting levels of investment.